James H. Craggs Construction Company, Appellant, v. Hugh G. King et al., Appellees, 274 F.2d 1 (5th Cir. 1960)

The sole question presented by this appeal is whether there was sufficient evidence before the court below to support the verdict of the jury in favor of appellee King awarding damages for the breach by appellant Craggs of a hauling contract. King, plaintiff below, brought this action in a state court of Georgia for expenses and loss of profits resulting from an alleged breach of a subcontract entered into between him and appellant James H. Craggs Construction Company, defendant below, the prime contractor under a government contract covering construction work at Turner Air Force Base, Georgia. Craggs removed the case to the District Court, filed an answer and counter claim against King and his surety, United States Fidelity and Guaranty Company, which Craggs brought in as an additional party.¹  This appeal is from a judgment rendered upon jury verdict in favor of King and against Craggs in the sum of $15,000, which judgment has the effect of denying recovery upon Craggs' counter claims against King and the United States Fidelity and Guaranty Company.² 

Although the record contains some seven hundred printed pages and the exhibits are numerous and the briefs cover a wide range of arguments, the basic contentions of the parties are relatively simple. King contends that he had a contract, partly written and partly oral, to haul all of the concrete and the base aggregate with which Craggs would construct certain runways and taxi-ways for the government; that the agents of Craggs in charge of the work near Albany, Georgia refused to respect or perform plaintiff's contract, but on the other hand set about to run him off of the job soon after he began work upon it, also refusing to pay him for the work he had done. Craggs claims that its contract with King was entirely in writing, that many of the provisions King contended for and now seeks to enforce were bottomed upon agreements King claimed to have made with defendant's agents in charge of the work, who had no authority to amend or add to the contract; and it denied that it ran plaintiff off of the job, claiming, on the other hand, that plaintiff wrongfully quit his work and took his trucks away, causing defendant damages aggregating $27,954.39.

The case was submitted to the jury under the charge of the court below, which is not contained in the record, the jury returned a verdict in plaintiff's favor, and defendant claims here that there was no evidence upon which the verdict could legally rest and that its motion for directed verdict made at the close of plaintiff's evidence and repeated after all of the evidence was in, and its motion for judgment notwithstanding the verdict should have been granted.

Craggs, on April 29, 1958, entered into a written contract with the United States of America for the "Construction of Runway and Taxiway, FY-58." Said government contract was referred to in a number of documents and in the testimony, but it was not offered in evidence:

About May, 1958, Craggs, a Florida corporation, through J. R. Fitzgerald, its vice president, and D. B. Murphree, its field engineer, conducted negotiations with King which culminated in a written contract dated August 21, 1958, the salient features of which are reproduced in the margin.³  Plaintiff charged that the written contract covered only a portion of the agreement between the parties and that other features were added or the initial ones explained by supplemental oral agreements and by dealings between the parties as the work progressed.

At the extended trial seventeen witnesses testified and more than a dozen exhibits were introduced in evidence, all without objection on either side. Craggs contends simply that there was not sufficient evidence to support a jury finding in favor of King. A careful reading of the record leads us to disagree with this position, and it is necessary to set out at some length the evidence favorable to King which the jury was justified in accepting. In sifting this evidence from the vast amount contained in the record it will be helpful to assemble it as it relates to the grounds King asserts as constituting the basis of his claim of a breach of his contract.

It should be kept in mind that negotiations between Craggs and King began in May, 1958, and that the parties all thought then that the work under discussion would be begun at a fairly early date. June 18th, Craggs submitted to King a writing purporting to set out the agreement between the parties, which brought on much more discussion and some changes in the written contract before it was executed August 21st. One of the main points discussed throughout the whole period of the dealing of the parties was the base rate of pay which King would receive for his hauling.

The written contract provided only that King should haul base aggregates "at a unit price of twenty-two cents ($0.22) per ton," and "concrete batches (of coarse aggregate, fine aggregate and cement) at a unit price of twenty-five cents ($0.25) per ton." King contended throughout that this price was based upon and was dependent upon the distance of the respective hauls, and he had David B. Murphree, Jr., engineer in charge of construction for Craggs, write him a letter dated July 4, 1958,⁴  and introduced evidence of substantiating conversations, both before the contract was signed and during its abortive execution, between King on the one side, and Fitzgerald, Craggs' vice president, Lavender, its superintendent in the field, and Murphree, its project engineer on the other.

Murphree pointed out to King on the ground where the roads to be constructed by Craggs would run. Craggs did not build the roads along the routes so indicated, but so located them that the closest hauls, according to measurements made between Murphree and King in the latter days of their dealing, was 3.4 miles, and the longest was 4.10 miles. King complained constantly and fervently to Murphree and also to Lavender and Fitzgerald that he could not make any of the hauls over the longer routes at the price mentioned in the contract, and these representatives of Craggs merely temporized with him, telling him that due adjustment would be made to cover the added distances. As the product, in part, of these constant arguments, in which Fitzgerald at one time "raked Murphree over the coals" in a telephone conversation in King's presence, Murphree developed and demonstrated a dislike for King which dominated his actions in his dealings with King.

As background for the dealings during the crucial period from September 5th to October 5, 1958, should be considered a letter written by Murphree in the name of James H. Craggs Construction to King dated September 5, 1958, which is reproduced in the margin.⁵  The letter was written on a day when Murphree and King were having conversations at the performance site of the contract; and, following conversations already in progress and upon receipt of the letter, King moved onto the performance site September 8th, taking his house trailer in which he lived until the cessation of performance activities about October 1st. King took to the site with him at that time seven trucks suitable for hauling the base aggregate and had more than double that number ready to move in when needed.

Despite the constant pleading of King, Murphree never did agree definitely to pay any more for the additional distance until the break-up between the parties was in process of consummation, at which time he agreed to allow three cents more per ton than the written contract called for.

The character of the roads provided was made the subject of protest by King, who claimed that he had been assured that most of the haul would be upon paved roads, whereas the roads provided were rough and not kept up and were in such condition that one or more trucks turned over with considerable damage to King and those whom he employed to assist in the performance of the hauling contract.

Related to the matter of distance as an item in arriving at the amount King would be paid by Craggs was the matter of the method by which weights were to be determined. The written contract called for payment of so much per ton. Murphree and King discussed whether they would accept the weights fixed by the railroads which would haul the base aggregate to the premises, or would weigh each truck and truckload to determine the net weights. After considerable hauling had been done Murphree wrote King a letter⁶  dated September 16th in which he advised: "From information furnished by the Corps of Engineers we will arrive at the weight of material per inch, for each square yard. Borings by the Corps will give us an average thickness for the entire job. * * * We feel that this is the most accurate and satisfactory manner in which to compute the tonnage." This meant that King was to be paid, not on the basis of weight ascertained in the usual way, but on the basis of cubic measurement after the aggregate had been put in place and compacted by heavy machinery. King testified that this change would reduce his income from the contract by about forty per cent.

Another feature not covered by the contract was the amount of materials which King would haul on his trucks when the hauling of batch material should begin. Murphree advised him that he would be limited to two and one-half tons per truck. This would mean that the trucks would be operated at about half their capacity.

King and the subcontractors he had brought there to haul "batch" had busied themselves over the period from September 8th to about October 1st hauling the base aggregate and 1872 loads were hauled for which King never received any payment. King produced testimony that Murphree had assured him that the trucks would be kept busy ten hours per day and six days per week. The failure of Craggs to have the aggregate materials brought in by railroad on schedule produced a situation where the haulers were able to keep busy only a fraction of that time. King made an effort to give them extra work by buying and tearing down a house and beginning construction of a shop upon the contract site; but nevertheless during this period the men King had brought to the job were able to keep busy only a small portion of the time.

The hauling of concrete batching (consisting of coarse aggregate, fine aggregate and cement) was the subject of greatest controversy between Craggs and King and furnished the final occasion for the breach between them. The written contract between the two made no mention of how the batch would be loaded into King's trucks. But all of the proof showed that the loading was to be done by Craggs, which purchased in California and installed on the contract site, two loading units for depositing batch in the trucks. A truck would drive under the first unit, which would deposit in it coarse aggregate and fine aggregate and pull up a short distance to the second unit where sand and cement would be dropped into the trucks.⁷  A special type of truck was required having three compartments and the trucks owned by King were not suitable for hauling batch.

King arranged with Davis, represented by Adams, to furnish trucks with three compartments which had been engaged generally in the hauling of batch. Three of these trucks were brought to the contract site, and Murphree measured and examined them carefully and stated that, in his opinion, they were exactly what was required to do the job properly.

Having been advised by Murphree's letter, footnote 6 supra, that the batch plant would be ready to operate the week of September 15th and that the trucks must be on hand prior to that time, King arranged with Adams to have thirteen of these trucks, deemed by both of them to be suitable and adequate, upon the camp site on September 13th; and seven more were available at a nearby point if they should be needed. There was testimony that trucks of this character were rented in the open market at from ten to fifteen dollars per hour. The batch plant was not completed until September 29th, and was not in fact put into operation until October 1st. Adams and his trucks remained on hand ready to work until October 1st, but were never permitted to haul a load of batch. They hauled base aggregate in small quantities, but the proof showed that Adams had been forced to an outlay of about three thousand dollars to pay the haulers, who were largely idled during the period.

Representatives of the Government were not satisfied with the Adams trucks, feeling that a can or wooden receptacle should be installed in one of the compartments to carry the cement. Adams and King were entirely willing to make these installations, and Murphree told Adams to go ahead and begin the hauling of batch, inasmuch as his trucks had theretofore proven adequate for the purpose, and if a trial period of about three weeks did not satisfy the government representatives, the additional installation of cans could then be made. Somewhere along the line Murphree made overtures to Adams to employ him and his trucks direct, despite the fact that Adams was subcontractor of King.

In the meantime one of Craggs' employees told King of a man named Drossner, of Miami, who had trucks fully equipped to haul on government jobs, including the cans for the cement; and, with Murphree's knowledge, King called Drossner and arranged with him to bring his trucks to Albany and haul batch for him. Several telephone conversations between the two ensued and Murphree was kept advised of the negotiations and arrangements.

Meantime Craggs sent from its office at Gainesville, Fla. to King, care of Craggs Construction Company in Albany Ga., a telegram which Murphree personally delivered to King at his trailer home. Its impact upon the breach between the parties warrants its full reproduction.⁸  This telegram was sent when Craggs knew of the presence of a sufficient number of the Adams trucks to do the job and of the arrangements being consummated between King and Drossner. The contract called only for equipment which was "adequate" and there was ample proof that the Adams trucks were adequate. Nevertheless King went forward with the plans to employ Drossner.

Drossner arrived with some of his trucks September 25th. He went to King and advised King in a peremptory manner that he was looking for somebody with big money which he could get hold of without any delay. Before King could get in his words Drossner departed and went to see Murphree who, without consultation with King, paid Drossner $500. In keeping with his practice of making a written record of his dealings with King, Murphree wrote King under date of September 26th,⁹  sending the letter, not to King's trailer where he knew King was present, but to Fort Gaines, Georgia.

There were other items in controversy between Murphree and King, but the foregoing will suffice to illustrate the happenings which led Adams and King to take their equipment away from the contract site. It might be mentioned that King had bought several thousand dollars worth of tires and spare parts for his trucks, and testified that he had been forced to pay out from nine to ten thousand dollars during the time of his so-journ there, and that all of the trucks brought there by him and by Adams were idle eighty per cent of the time during the three or four weeks they were waiting for the batch plant to get ready for operation and for arrival of the base aggregate. The arrival of Drossner signaled the end of King according to his testimony, a portion of which is reproduced in the margin.¹⁰ 

Drossner began to haul batch on October 1st under arrangements made entirely between him and Murphree, without any further contact with King. Adams and King agreed that Adams would send one of his trucks under the batch-loaders and try to get in on the hauling. At the time both Lavender and Murphree were standing on the platform above where the Adams truck parked. The first batch-loading machine dumped some aggregate into the Adams truck, whereupon someone yelled from the platform where the two officials were standing and told the truckdriver to pull away and go and unload the aggregate. This was done. Later, King tried to talk with Lavender and the latter "cursed me out and told me what he was going to do, going to beat me and put me in jail, going to impound all my trucks." On October 1st, Adams left with his trucks and a few days later King pulled out with his. Between the two 1,872 loads of base aggregate had been hauled for which no payment has ever been made.

We think the evidence outlined justified the jury in finding that Craggs had breached its contractual relationship with King and that King was justified in pulling out with his equipment and in filing this civil action. The damages allowed by the jury were amply proved.

The case, as reflected by the record, is one essentially of fact with very little law involved.¹¹  The efforts of Craggs to disavow the actions of Murphree and Lavender, its ranking agents and its sole representatives at the point where the contract was being performed, are, in our opinion, wholly without merit. Besides having and exercising full control over all of the operations with respect to which King contracted with Craggs, Murphree wrote twelve letters to King and the surety company, most of which were placed in evidence by Craggs. In addition, King was in direct contact with the officials of Craggs at its home office on a number of occasions and Murphree talked with them in King's presence. Neither Lavender nor any corporate official of Craggs took the witness stand. We repeat that all of the evidence on both sides was introduced without any objections as to competence under the claim that the statements and agreements made and the actions taken were incompetent, because they had the effect of varying, altering or amending the terms of the written instrument. We are not called upon to decide, therefore, any question concerning the evidence which would be admitted to put us as nearly as possible in the position of the contracting parties, cf. T. B. Walker Manufacturing Co. v. Swift & Co., 5 Cir., 1912, 200 F. 529, or what part of the evidence, if any, ought to have been excluded under the parol evidence rule, cf. Major Appliance Co. v. Hupp Corp., 5 Cir., 1958, 254 F.2d 503; Baker v. Nason, 5 Cir., 1956, 236 F.2d 483; Petroleum Financial Corp. v. Cockburn, 5 Cir., 1957, 241 F.2d 312; and Fidelity-Phenix Fire Ins. Co. v. Farm Air Service, Inc., 5 Cir., 1958, 255 F.2d 658.

It is plain that, as tried in the court below and presented to us, the case is typically one of fact. The jury chose to accept King's version of the multitudinous dealings between him and Craggs' agents. It is clear that it was justified in so doing. Finding no error in the action of the court below, the judgment appealed from is

Affirmed.